Tariff developments by region
  • North America: Trump granted a temporary tariff exemption for USMCA-compliant Canadian and Mexican imports until 2 April, later expanding it beyond automakers. Canada responded with USD 21 billion in counter-tariffs on U.S. goods and a 25% surcharge on electricity exports from Ontario.
  • China: The U.S. doubled tariffs on Chinese imports to 20%, prompting China to impose 10-15% tariffs on key U.S. agricultural exports, including soybeans, pork, and beef.
  • European Union: While broad U.S. tariffs remain undated, steel and aluminium tariffs will take effect on 12 March. The EU is expected to retaliate but may wait for either specific EU or reciprocal tariffs scheduled for 2 April.
Current tariff overview:
Country/Coverage  Tariff  Date active  Broad exemptions
Mexico 25% 4 March (exempt until 2 April) Imports under USMCA
Canada 25% 4 March (exempt until 2 April) Imports under USMCA
China 20% 4 March  None announced
EU 25% (speculated) TBD TBD
Steel & aluminium 25% 12 March Specific exemptions
Reciprocal tariffs ~ 2 April TBD
 
Upcoming reciprocal tariffs – 2 April

Trump’s reciprocal tariffs could be implemented in two ways:

  • HS code matching – tariffs applied on a product-by-product basis, matching those imposed by other countries. This method is highly precise but complex and slow to implement.
  • Flat rate calculation – a uniform tariff applied per country, based on total import values. This approach is simpler and more efficient.

The administration has not confirmed which method it will use or whether tariffs will take effect as planned. There are also indications that VAT may be factored into tariff calculations, which could result in higher duties on EU imports.

Sector deep dive: impact on renewable energy

In addition to pausing federal IRA and IIJA funds for renewables, the proposed tariffs are expected to drive up capital expenditures (CapEx) and increase costs for renewable energy projects.

Impact will vary across onshore wind, solar, and battery storage, with four scenarios analysing the effects on the levelised cost of electricity (LCOE) – a key metric that measures the average cost of electricity generation over a system’s lifetime.

Tariff scenarios:
  • Scenario 1: targeted tariffs – 25% on imports from Mexico and Canada, an additional 10% on China, and 25% on steel and aluminium.
  • Scenario 2: universal tariff – a 25% tariff on all imported products, including steel, aluminium, and copper, from all countries without exemptions.
  • Scenario 3: full-scale trade war – a 50% tariff on all imports, including steel, aluminium, and copper, from all countries without exemptions.
Projected impact
  • Scenario 1 (current situation): onshore wind projects see the most impact, with LCOE rising by 6% due to Mexico’s role in turbine blade supply.
  • Scenario 2 (universal tariff): solar energy costs increase by 7% due to reliance on Southeast Asian panel manufacturers.
  • Scenario 3 (trade war): battery storage faces the biggest impact, with LCOE rising sharply due to increased costs of Chinese battery modules, which are critical for balancing wind and solar energy production.

U.S. economic outlook and key takeaways from Trump’s address The latest tariffs continue to disrupt global markets, with the stock market seeing declines over the past week. While the administration acknowledged an expected “adjustment period”, it avoided addressing concerns about inflation or a potential recession.

Meanwhile, Republicans are pushing a that lays the groundwork for future tax reductions. The bill includes deep cuts to social services and federal spending, but is expected to add USD 2.8 trillion to the deficit by 2034.

What to watch this week

Congress must pass a 2025 budget by 14 March to avoid a government shutdown. Using reconciliation, Senate Republicans can pass the bill with a simple majority (>50 votes), but unity is crucial. While passage is expected, a deadlock remains possible – mirroring Trump’s previous term when a shutdown lasted five weeks.

Get in touch

Business Sweden has extensive experience in tariff scenario analyses, localisation evaluations, and supplier assessments. If you need support in assessing your supply chain or navigating the impact of these tariffs on your U.S. operations, please contact Johan Karlberg.

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